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HARRISBURG - A new state checking system designed to stop inmates in county and state prisons from receiving unemployment compensation benefits is projected to bring savings of more than $100 million this year, a state cabinet secretary told a congressional hearing Wednesday.

Secretary of Labor & Industry Julia Hearthway said the department placed "incarceration stops" on more than 4,000 unemployment compensation claims during the year's first quarter by using this system.

When a new inmate enters a prison, an automatic check is made with unemployment compensation rolls maintained by the department, she said. If a match is found and verified, the individual is removed from active unemployment compensation benefit status.

The secretary described the Pennsylvania Justice Network program as a preventive strategy aimed at stopping fraud before benefits are paid. The department bases its $104 million savings estimate by calculating the average duration of an unemployment compensation claim and average weekly benefit with the number of stopped claims, she said.

The department is also cracking down on unemployment compensation fraud by using software to block claims using foreign Internet Protocol addresses and foreign area codes, said Ms. Hearthway. Nearly 4,000 foreign IP addresses were blocked during the first six months of this year.

Ms. Hearthway testified at a subcommittee hearing of the U.S. Committee on Ways and Means focusing on ways to "end cash for convicts" and improve the integrity of the unemployment compensation program.

The subcommittee chairman, Republican U.S. Rep. Dave Reichert of Washington said reports coming from several states suggest that millions of dollars of unemployment compensation benefits have been paid wrongly to individuals who are not able and available for work because they are behind bars.

"Unemployment benefits are meant to provide needed assistance to individuals who have fallen on hard times, but who are able and trying to find work so they can provide for themselves and their families," said Mr. Reichert. "In the case of incarcerated individuals, it is an injustice that the tax dollars of law-abiding citizens are being used to provide assistance to people who have broken the law and should not qualify for these benefits."

In other testimony, Sharon Dietrich, a managing attorney for Philadelphia-based Community Legal Services Inc., said unemployment compensation fraud can't be tolerated but urged that it be examined in the context of overpayments of benefits.

"While I understand the outrage around people who are incarcerated collecting benefits, clearly this is a small subset of claims that are found to be fraudulent, much less overall overpayment numbers," she said.

She said overpayments cover all situations where people receive unemployment compensation benefits for which they are later determined to be ineligible.

Overpayment of unemployment compensation benefits is on the rise because of inadequate federal funding for state programs which leaves administrators and staffers overburdened, said Ms. Dietrich.

She urged the panel to put an emphasis on improving criminal justice system databases so the information used to identify incarcerated persons is up to date and reliable.

Contact the writer: rswift@timesshamrock.com

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